A "Hedge Fund Hotel" - its UBS again!
Team Latte
January 3, 2007

We are actually trying to put a positive spin to this story. Well, there is no story here really; and all said and done, it appears pretty innovative taken at its face value. VCs and Angels do it all the time. So what's the big deal?

The big deal is that it seems UBS, the behemoth banking and financial services company, has an eternal penchant for getting on the wrong side of the regulators. Be it a sexual harassment case or securities laws violation you can always trust UBS to give the regulators their fair share of the chase. This time it is leasing space, within its own premises, to budding and start up hedge funds with which the bank develops trading and commercial relationship. And it has again got the regulators' attention.

Normally we would have overlooked this story when we first saw it in a small corner of one of the inner pages of Financial Times this morning. But the words "regulator" and "subpoena" caught our attention. But then we thought again, so what? However, in the afternoon one of us while reading the International Herald Tribune came across that story again but this time on page 9 of the paper, which is the first page of the Business section of the paper. And four lengthy columns were devoted to the story with a headline saying: ' The hedge fund hotel: a shady place to dwell? ' Now this sounds really raunchy and we think this heading is really not apt and does not do justice to the story in the paper. You will find out after reading the articles in the following links that there is nothing sinister or "shady" about the hedge fund hotel run by UBS - at least not yet. But if you read the IHT article then you'll also see that there is a promise of good and spicy story, and unfortunately it is about UBS again.

• UBS Hedge Fund Hotel Probed
  News.com.au, Australia - Jan 3, 2007
  http://www.news.com.au/business/story/0,23636,21005439-31037,00.html
• Massachusetts probes UBS hedge fund "hotel"
  Reuters, New York - Jan 2, 2007
  http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-01-02T173212Z_01_N02427022_RTRIDST_0_UBS-SUBPOENA.XML
• The atlas of new money
  Moneyweb, South Africa - December 17, 2006
  http://www.moneyweb.co.za/shares/international_news/523986.htm
• U.S. regulators grow alarmed over 'hedge fund hotels'
  International Herald Tribune - Jan 1, 2007
  http://www.iht.com/articles/2007/01/01/business/Hedge.php
• Banks' Leases to Hedge Funds Are Questioned
  New York Times - Jan 2, 2007
  http://www.nytimes.com/2007/01/02/business/02hedge.html

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